Income Statement Data Cash Sales $30,000,000 Accounts receivable Cost of goods sold Balance Sheet Data $1,500,000 Accounts payable 3,000,000 Accruals 4,500,000 Notes payable 9,000,000 Current liabilities Long-term debt Inventory Gross profit Operating expenses Current assets EBIT $1,800,000 600,000 2,400,000 4,800,000 6,900,000 11,700,000 1,575,000 4,725,000 6,300,000 $18,000,000 15,000,000 15,000,000 7,500,000 7,500,000 1,116,000 6,384,000 2,234,400 $4,149,600 Total liabilities Interest expense Common stock EBT Net fixed assets 9,000,000 Taxes Retained earnings Total equity Total debt and equity Net income Total assets $18,000,000 If I remember correctly, the DuPont equation breaks down our ROE into three component ratios: the net profit margin the total asset turnover ratio, and the equity multiplier And, according to my understanding of the DuPont equation and its calculation of ROE, the three ratios provide insights into the company's use of debt versus equity financing , effectiveness in using the company's assets, and management of its liquidity and its tax records Now, let's see your notes with your ratios, and then we can talk about possible strategies that will improve the ratios. I'm going to check the box to the side of your calculated value if your calculation is correct and leave it unchecked if your calculation is incorrect. Check if Hydra Cosmetics Inc. DuPont Analysis Check if Correct Ratios Asset management ratio X Total asset turnover Value Value Correct 50.00 1.67 Ratios Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) 21.28 23.05 Financing ratios Equity multiplier 59.28 1.54 Landon OK, it looks like I've got a couple of incorrect values, so show me your calculations, and then we can talk strategies for improvement. You I've just made rough calculations, so let me complete this table by inputting the components of each ratio and its value: Hydra Cosmetics Inc. DuPont Analysis Calculation Value Numerator Denominator 1 0.25 Ratios Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) Asset management ratio Total asset turnover Financing ratios Equity multiplier 7,500,000 4,149,600 4,149,600 30,000,000 30,000,000 13,500,000 0.14 0.31 30,000,000 18,000,000 1.67 =